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New car balances are growing as a proportion of the total portfolio. Perhaps more strikingly, indirect lending overtook direct lending in total balances — new and used — in the second quarter of 2015 and continues to build. That’s despite some misgivings among credit unions about the stickiness and quality of the relationships with members and dealers alike.

More than 5,500 credit unions, or 97.2% of the industry, held auto loans on their books as of third quarter 2016. But no two credit unions are alike, so it can be difficult for credit union executives to identify peers and share best practices for auto data benchmarking. Broadening analysis to metrics other than growth is one way to help executives, staff, and board members better understand markets and the industry.

When a member needs cash now, Freedom First Credit Union offers a way for its members to quickly and conveniently borrow money. But this twist on the payday-style loan has a built-in, behaviorally driven savings component.

These members often have credit issues and are not ideal borrowers. So Freedom First debuted Borrow and Save in the second quarter of 2012 as a way to meet the financial needs of its membership, provide fast cash with affordable interest payments, and contribute to borrowers’ future financial wellness.

Buying a car can be an arduous, time-consuming task for members. For credit unions, the process includes many touch points during which they can lose member financing, especially when members shop at dealerships that have a tenuous relationship with the cooperative.

To retain more point-of-sale business, credit unions can pre-approve members and provide them with a physical check to present at the auto dealership. The auto drafts give members more confidence in the buying process, keep them on a budget, and reduce the likelihood they take out financing elsewhere.

The high delinquency rates of loans made to poorly vetted borrowers then packaged into bonds and sold to investors have raised fears of a bubble.

Sound familiar?

It does to Bob Dempsey, president and CEO of Cascade Community Credit Union, who sees unsettling parallels between what’s happening now in auto lending and the U.S. mortgage boom that ended in 2008 with the worst recession since the Great Depression.

In early 2012, Directions Credit Union was looking for ways to increase its loan portfolio. It had offered auto leasing through Credit Union Leasing of America (CULA) since 2002, but the credit union could do more to expand its business into the Northwest Ohio market. Increasing investment in this area has allowed the credit union to originate just north of 3,300 leases corresponding to $104 million since 2012.

When Matt McCombs became CEO of Vibrant Credit Union in May 2011, pricing in the indirect channel was competitive in both rates and dealer reserves. So, the credit union became more aggressive in capturing direct auto loans. In July of 2011, Vibrant launched a refinance campaign to shore up auto loan penetration within its membership base. In just three months, Vibrant went from closing $1.5 million to $2 million a month in direct auto loans to more than $30 million. Today, Vibrant’s auto loan penetration is 29.2% versus 19.9% for the 233 credit unions of a similar size.

Indirect auto lending is on the rise in the credit union sphere. Philosophically, the industry’s opinion of indirect lending is split. Some credit unions believe indirect lending brings in new members who otherwise would not tap into the cooperative FI model. Others believe indirect lending adds hidden costs and unnecessary layers the credit union must break through to build personal relationship with members.

However polarizing the topic, indirect lending is in the midst of a boom.